Marek Mozalewski. Organizational determinants of innovativeness of Small and Medium-sized Entreprises in Polish machinery industry

Transcription

1 Marek Mozalewski Organizational determinants of innovativeness of Small and Medium-sized Entreprises in Polish machinery industry Organizacyjne determinanty innowacyjności małych i średnich przedsiębiorstw w polskim przemyśle maszynowym Doctoral dissertation summary PhD Advisor: Prof. dr hab. Wiesława Przybylska-Kapuścińska Department of Money Theory and Financial Markets Poznań 2016 Wydział Gospodarki Międzynarodowej al. Niepodległości 10, Poznań tel wgm@ue.poznan.pl

2 Doctoral dissertation summary The matters of innovation and organizational innovativeness are currently one of the most important aspects of business functioning in a highly competitive environment. Innovative activity should be managed in the same way as other function or process present within the organization. It could be treated as a set of activities that encompasses planning and decision making, organizing, leading and supervising. Thereby, that aforementioned activities apply to organizational resources that should be managed in order to achieve the established objectives [Baruk 2013, pp ]. Therefore, systemic action that enables effective management of the available resources and factors determining the level of innovativeness is particularly important. The topic of innovativeness of companies has been widely covered in both theory and empirical evidence in international and domestic literature. Studies conducted in Poland encompass the following aspects of innovativeness of small and medium-sized enterprises: state of innovativeness differentiated on regional and industrial basis; sources of innovations; external, internal and systemic barriers that limit innovativeness; internal determinants of innovativeness in general. In the course of studies on the issue of innovativeness the author noticed that the existing research does not describe the organizational determinants of innovativeness in small and mediumsized enterprises. It is a result of the research conducted indepentently on factors such as: business characteristics of companies, e.g. age, size, ownership form, scope of activity, type of served customers; organizational determinants defined as, e.g. organizational culture, organizational structure, leadership, ability to cooperate between organizations, portential of the management team, internal communication system, reserves to be used for the purposes of innovativeness building (organisational slack). Existing research doesn t include the following topics: existence of specific organizational determinants in organizations based on business criteria; the role of organizational determinants in innovativeness of specific organization.!2

3 The size of an organization can however act as a criterium chosen from the business characteristics. It significantly differentiates behaviours, needs and habits of small and mediumsized eterprises from those of large organizations. Thus, the need to expand the knowledge on factors that determin their ability to innovate can be observed. Small and medium-sized enterprises are distinguished by certain characteristics, which have a significant impact on the factors of organization's innovativeness. They are, among all, as follows: [Lachiewicz, Matejun 2012, pp ]: domination of owner and his personality in the organisation's system; simplified and low formalized organizational structure with better flexibility in terms of operational activities, existence of one decision point, limited range of privileges; high flexibility that enables quick response to environmental changes; recruitment based on the personal (family) relations; motivational elements based on not only on financial aspects but also on informal contacts (direct), strong integration with company, extensive cooperation with employees and strong empowerement. It was indicated above that the knowledge of determinants of innovativeness in small and medium - sized entreprises should be generally updated. The new question is that if we know the determinants of innovativeness in small and medium-sized entreprises, are they the same for all organizations or maybe industry dependant?. The presence of differences in this area seem equally probable on the basis of different conditions of operation of the industrial and service enterprises. We can assume that there is a difference even due to various internal and external factors, with which companies must face in different markets. Hence, there is an extremely important issue to identify the determinants of organizational innovation of small and medium-sized enterprises operating in the sector. The main goal is to analyze the engineering industry. Author assumed that the analysis of the characteristics of small and medium-sized businesses, complemented by specific features of the sector and stakeholders, will determine the determinants of organizational readiness describing the organization to pro-innovative attitudes. The necessity of such analysis is also the result of the fact that small and medium-sized enterprises are not aware of the benefits of working on innovativeness. Small and medium-sized enterprises of the machinery sector are characterized by numerous problems left over from the period of economic transition, such old machinery, lack of young, educated employees, limited access to know-how. The particular added value seems to have a definition of recommendations resulting from the analysis of the determinants of the model, allowing for the effective implementation of modern management methods based on innovation and!3

4 allowing management to increase the competitive advantage of companies. It is therefore necessary to identify them these determinants and an indication of their importance for small and medium enterprises to create entrepreneurs in the need to intensify work on the identified elements of the organization. The importance of this subject is strengthened by machinery industry, which plays very important part in the economy but is not the subject of a broad research, especially in terms of innovativeness. Moreover it is very important due to many internal problems which are part of this industry but cannot be resolved without big investments. In author s opinion this research field is very important in terms of theorethical (supplementation of existing research) and practical aspects (supporting companies in building competivie and innovative organizations). The thesis illustrates the topic of the organizational determinants of innovativeness in small and medium-sized enterprises in machinery industry in Poland. The choice of the subject was determined by the following premises: the author s belief that there exists a strong need to identify determinants of innovativeness in small and medium-sized enterprises in machinery industry in Poland; the author's personal experiences connected with work within the strategic management field, especially in terms of advisory in field of building effective organizations and innovativeness based on identified organizational determinants. The main objective of this study is to identify organizational determinants of innovativeness in small and medium-sized enterprises in Polish machinery industry, as a result of a detailed analysis, as well as of a verification of specific traits of given organizations and findings from the previous studies on the topic of the determinants of innovativeness. Achievement of the main objective demanded setting of the following specific objectives: analysis of the factors that determine functioning of small and medium-sized enterprises, in regard to their specificity within the machinery industry, on the basis of previous research conclusions and literature review; verification of the organizational determinants of innovative small and medium-sized enterprises based on existing research findings and analysis of the literature; identification and assessment of the impact of organizational determinants of innovation for small and medium-sized enterprises machinery sector; identify the strategic actions needed to enhance the innovation capacity of small and medium-sized enterprises machinery sector.!4

5 In order to formulate the thesis statements the author used a definition of the organizational determinants based on Roger s Model of the Innovation Process [Rogers 1995]. Identified determinants have been collated with specific characteristics of small and medium-sized enterprises, which later enabled the following research theses to be set: Hypothesis no. 1: Pro-innovation determinants of organizational small and mediumsized enterprise may be specific to the industry. Hypothesis no. 2: Determinants of Organizational small and medium-sized enterprises in the machinery sector largely inhibit the innovation. In order to address the undertaken research problem, aforementioned theses and qualitative nature of the study, an adequate research procedure and research method were chosen. Research procedure took five stages. The first stage focuses on issues concerning the theory of innovation - analysis of the theoretical aspects, enabling the understanding and identification of the main issues related to innovation and innovation identified with use of current national and international research. The second step in the implementation of the work considerations relating to the functioning of small and medium-sized enterprises. There are a number of characteristics which determine the manner of their functioning, as well as differentiating this type of organization from large companies. In addition, it realizes that there are factors of an internal nature (organizational determinants) affecting the functioning of small and medium-sized enterprises and the way they take the issues of innovation and management. It writes in it also, that it is important to detailed verification, and organizational determinants of innovation are separate for each sector, in this case, the machinery sector. The author is presumed that the industrial enterprises of the machinery sector which is one of the pillars of the economy, which is also a market strongly affected by the transition period, these are unique examples of overlap of different business characteristics and factors determining their way of functioning, and market problems of a different nature and intensity affecting the company only in this sector. The third step allows you to explore the characteristics of the machinery sector and the characteristics of the entities operating on it. It presents what level of innovation is characterized by the sector. The observations on the characteristics of small and medium-sized enterprises machinery sector could lead to a very important conclusion, indicating that there are a number of features that are determinants that determine the functioning of small and medium-sized enterprises machinery sector.!5

6 The fourth stage of the research procedure is focused on conducting detailed deliberations on a set of determinants of innovation in the sector of small and medium-sized enterprises in general. The basis for its determination is an analysis of theoretical and empirical research and model solutions in the field determinant of innovation organization. Made in the fourth stage of exploration literature and empirical research became the basis for the development of the model of the determinants of organizational innovation for small and medium-sized enterprises of the machinery sector. Model has been adopted on the basis of two existing models of organizational determinants of innovation ie. De Jong, Brouwer and Pichlak. In this essay Author attempts to show that the company machinery sector has a number of specific characteristics that require specific action on the organizational side, the same intensity and the need to manage a specific determinant is different for each type of company. Moreover, in the case of small and medium-sized enterprises machinery sector has been determined the nature of the determinants of the innovation process. In order to assess the strength of the impact of identified determinants proposed importance to assess the impact of individual determinants of the innovation process and thus the ability to create innovation in small and medium-sized enterprise sector machinery. To assign weights adopted a method based on expert conducted considerations and the author's experience. The above analysis was also verified using a sensitivity analysis of small and medium-sized enterprises in general. It verified whether there are many gaps in innovative small and medium-sized enterprises machinery sector in relation to other companies and therefore these determinants vary by sector. The synthesis of considerations is a SWOT analysis for the identified determinants of organizational innovation of small and medium-sized enterprises machinery sector. It points to the need for elimination of risk and seize opportunities, the need to take measures to make the achievement of innovative capacity in accordance with the defined innovation process and taking into account the accompanying determinants. In the sixth stage presents recommendations arising from the author's model of organizational determinants of innovative small and medium-sized enterprises of engineering sector and analysis to increase their level of innovation. The structure of work is a reflection of the approach of the doctoral dissertation. The work consists of five chapters with an introduction and summarized ending.!6

7 The purpose of the first chapter is to present the theoretical background of innovativeness. It contains the origin and key definitions that can be found in literature. The definition naturally connects with its typology which describes innovation according to four basic criteria: scope, value, originality and origin.. What is more, the chapter demonstrates the terminology connected with the definition of innovativeness of an organization as well as describes the methods of its measuring. The second part of the chapter investigates the key characteristic of innovation process - sequencing. It provides a detailed description of the academic outcomes connected with the issue of models of innovation process, in accordance with its external environment. The chapter is concluded with the description of innovation as a management process. The second chapter contains a detailed description of the SME sector in Poland, treated as a set of innovative subjects, was presented. The definition and classification of small and mediumsized enterprises became the starting point for further investigation. Next, the key characteristics of small and medium-sized were presented, including those that differentiate them from large enterprises. What is more, the role that innovations play in due course of the development of small and medium-sized enterprises was described, which is especially vital as far as later comparison between the determinants and actions required for the ability to innovate to arise is concerned. Such comparison between small and medium-sized enterprises' characteristics, the role of innovations and barriers to achieving business goals enabled the author to provide a comprehensive answer to the question: how important should innovations be for those enterprises and which factors limit them. On the other hand, it made it possible to answer the question what should be done in order to change this status. The chapter is concluded with the description of the role that small and mediumsized enterprises play in the Polish economy. The third chapter describes the machinery industry. It remains to be a highly significant point of reference for later conclusions. Due to the fact that the previous chapter included a particular scheme of small and medium-sized enterprise, it was vital to indicate the characteristics that distinguish companies operating within the machinery industry. It was shown that small and medium-sized enterprises in the machinery industry have certain characteristics that distinguish them from typical small and medium-sized enterprises. Thus, this observation makes it possible to state that because a company operates in a different environment, incorporates different activities and has different external and internal issues (often additional while compared with other companies), it should be managed in a different way and therefore it would be characterized with different determinants of innovativeness. Apart from the overall characteristics of small and!7

8 medium-sized enterprises in the machinery industry, pro-innovative approaches of companies operating in Poland were also stated. Fourth chapter focuses on a presentation of the key aspects of the organizational determinants of innovativeness, including their definition, classification and characteristics from the operational point of view. The chapter presents a review and analysis of available scientific research as well as literature review of the aspects of defining, describing and determinant impact on the company's operations. The presented analysis, along with other chapters, made it possible to build a noriginal model describing determinants of innovativeness in small and medium-sized enterprises in the machinery industry. In the fifth chapter is presented an original model of the determinants of innovation in small and medium-sized enterprises for machinery sector. SWOT analysis allows to identify the strengths and weaknesses of the organizational determinants of innovative small and medium-sized enterprises machinery sector and the opportunities and threats that accompany them in a competitive environment. They indicated how they affect specific elements of the process of innovation and shows the general picture of innovation in the machinery sector. To assess the strength of the impact of the determinants of specified weight to assess the impact of various determinants expert on the process of innovation and thus the ability to create innovation in small and medium-sized enterprise sector machinery. Weighting was made (by expert) conducted on the basis of considerations and professional experience of the author. The weight and strength of the impact of individual determinants organizacyjności been verified by a sensitivity analysis. All used in this chapter methods of analysis - SWOT determinants and prioritization, assessment of impact strength and sensitivity analysis made it possible to assess the impact of the determinants and formulate recommendations designed to improve the innovation of small and medium-sized enterprises machinery sector The intended main purpose of the dissertation was to identify the determinants of organizational innovation of small and medium-sized enterprises in the Polish engineering industry. Main objective of the research was achieved. The author has identified the determinants of organizational innovation of small and medium-sized enterprises for machinery sector presenting their ranking. The analysis showed that examined determinants now have an inhibitory effect on the innovation process, and therefore it is important to take action to change their impact on the neutral or supportive. To this end, the author presents proposals to support small and medium-sized enterprises in innovation management and execution of changes. The way the author analyzes conducted showed that pro-innovation determinants of organizational small and medium-sized!8

9 enterprise may be different for industries (hypothesis 1). The author has analyzed the impact of weights and forces identified the determinants of innovation of small and medium-sized enterprises machinery sector. The study revealed that these determinants are essentially inhibiting innovation of small and medium-sized enterprises sector machinery (hypothesis 2). This confirms other research hypothesis. The conclusions of the discussion allowed to define the determinants of organizational innovation of small and medium-sized enterprises for machinery sector and to formulate demands determinant for ensuring the implementation of measures designed to weaken the weaknesses of innovation processes and strengthen their strengths innovation in the examined sector. Also presented a synthesis of the impact of the determinants of innovation organization. It can provide a valuable source of information and support in strategic planning and operations for managers and employees of small and medium-sized enterprises in the machinery sector. The investigations performed for the purposes of the thesis did not enable the author to explain the issues that arose in the course of research. Such explanation requires conducting of a further, detailed research to answer specific questions, e.g. how to build the innovation process (flow) on the basis of the aforementioned determinants of innovativeness in small and medium-sized enterprises and to what extent the said process varies from those identified in other companies. The present thesis, apart from its cognitive and academic value, without a doubt makes a rich source of knowledge for the entrepreneurs in the machinery industry, including both owners and management, as well as employees. It is especially valuable as to aspects connected with the answers that would clarify the way in which the internal structure of an organization can be effectively shaped in order for it to become innovative, subject to all of the strengths, weaknesses, opportunities and threats that emerge from the market.!9